After bill passed by government, the limit on tax-free gratuity doubled

On Thursday, a key bill was passed by the Parliament with the aim of empowering the government to fix an amount of tax-free gratuity and the period of maternity leave with an executive order. The Payment of Gratuity Bill was passed by the Rajya Sabha without much discussion because it failed to transact any important business over the last fortnight due to the protests made by various parties. Labour Minister Santosh Kumar Gangwar moved the bill which was passed by a voice note. An approval was given by the Lok Sabha to the important bill last week.

The government will be allowed to better the ceiling tax-free gratuity of Rs. 20 Lakh from the already existing Rs. 10 Lakh for those employees who are falling under the Payment of Gratuity Act by the Parliament. The ceiling of gratuity amount for the employees of the Central Government was doubled to Rs. 20 Lakh after the 7th Pay Commission was implemented. The government will be also be allowed to fix the period of the maternity leave for the female employees as deemed to be in a continuous service in the place of the existing 12 weeks. The amendment made to the payment of gratuity law comes with the Maternity Benefit Act of 2017 enhancing the maternity leave period to 26 weeks.